Back to the Beginning – Core Values

An article in the Harvard Business Review provided the insight into what is an ingredient missing in many organizations. “Building Your Company’s Vision,” by James Collins and Jerry Porras talks about core ideology, core values, core purpose, “big hairy audacious goals” and envisioned future. It’s a very interesting read, but the ‘gem’ is in the very simple notion of core values, which I think can be better defined as an organization’s sense of character or integrity.

The authors define ‘core values’ as the essential and enduring tenets of an organization – the very small set of guiding principles that have a profound impact on how everyone in the organization thinks and acts. Core values require no external justification. They have intrinsic value and are of significant importance to those inside the organization. They are the few extremely powerful guiding principles; the soul of the organization – the values that guide all actions.

The core values or ideology define the enduring character of an organization – a consistent “identity” that transcends product and market life cycles, management fads, technological change, and individual leaders. The organization may develop new purposes, employ new strategies, re-engineer processes and significantly restructure; however, the identity and ideology remains intact. In the authors’ words, “… core ideology provides the glue that holds an organization together through time.” A few examples:

Disney – the obvious core values of imagination and wholesomeness stem not from any market requirement but from Walt Disney’s belief that imagination and wholesomeness should be nurtured for their own sake;

Proctor and Gamble – product excellence is cultural, more like a religious tenet than a business strategy for success;

Nordstrom – service to the customer above all else and being part of something special; a way of life at Nordstrom long before customer service programs became stylish;

Sony – being pioneers and doing the impossible; seemingly obsessed with creativity and innovation.

It does seem that the ‘greatest’ companies over time possess unwavering intrinsic core values that define their identity. These organizations are not all things to all people. ‘Customer service’ doesn’t have to be a core value – it’s not for Sony. Neither is ‘teamwork’ for Nordstrom, nor ‘respect for the individual’ for Disney. This is not to say that Disney or Sony or Nordstrom do not embrace ‘quality’ or ‘customer service,’ or ‘teamwork.’ The greatest organizations have operating practices that contain these elements, but the elements are not the essence of their being. Nor is there a requirement that they be likable or ‘humanistic.’

The greatest companies seem to have decided for themselves what values are core, independent of the current environment, competitive challenges, or management fads. Core values may be a competitive advantage in a current context; however, they are core values because they define what an organization stands for. They are core values … just because. (Just because some individual decided they were important.) Values are ‘core’ “if they are so fundamental and deeply held that they will change seldom, if ever.” Values are core if they would be held even if they were a competitive disadvantage in certain circumstances.

Core values are deep, very deep. They are extremely important. Core values rarely change in light of market changes. On the other hand it is more likely that the organization will change markets if necessary to remain true to its core values.

The insight? It appears that for the greatest companies it doesn’t matter what the core values are – as they are so diverse. What really matters – is that an organization has core values at all. I think that is worth repeating somewhat more boldly …

What really matters – is that an organization
has core values at all.

Perhaps the key to ‘greatness’ in the sense of viability, adaptability, longevity, and relevance for organizations is this sense of character, identity, unwavering purpose, integrity and the core values that you truly stand for.

So how do we get core values that inspire us to greatness? How can we create them? It’s quite obvious that we cannot get them by looking outside at the external environment or competitors. It’s also quite obvious that our strategic planning exercises cannot possibly uncover the ideology that is the soul of our endeavours. It’s not an intellectual exercise. It’s not a wish list or vision of what the values should be. It is somewhat like (exactly like) discovering the core values we hold as individuals that provide unwavering guidance in our lives.

The authors offer a few clues:

Listen to people in truly great companies talk about their achievements – you will hear very little about earnings per share. Maximizing shareholder value does not inspire people throughout an organization and does not provide any guidance. Maximizing shareholder value is “the off-the-shelf purpose for those organizations that have not yet identified their core purpose. It is a substitute – and a weak one at that.”

You discover core ideology by looking inside. It has to be authentic. You can’t fake it. It’s meaningful only to people inside your organization and it need not be exciting to others outside. It’s an individual journey. And it is in the authenticity, the discipline and the consistency of the values, not the content, that differentiate the greatest companies from the rest.

“How do we get people to share our core values?” You don’t. You can’t. Just find people that are “predisposed” to share your values and purpose, attract and retain those people, and let those who don’t share your values go elsewhere.

This entire exercise is about having your integrity in – in the sense of your authentic values and your courage to act congruently all of the time.

And could it be that the seemingly unending quest for the answer – will ultimately take you back to the beginning – to what you are and what you stand for? And perhaps, this could be the first step to the beginning … on the path to greatness.

We shall not cease from exploration,And the end of all our exploring,Will be to arrive where we started, And know the placefor the first time.

Rick Sidorowicz

Rick Sidorowicz was the founder and developer of The CEO Refresher, and a passionate customer service advocate. He had over 25 years of experience in COO and CFO roles in a variety of retail, service and distribution enterprises, with a track record of success in business start-ups, restructuring, turnarounds and revitalizing organizations.